·    Strategic positioning enhanced as new tariff environment highlights Kasiya’s potential as world’s largest and lowest-cost non-Chinese graphite producer with industry-leading US$241/t incremental cost of production

·    Market dynamics impacted by new U.S. Commerce Department 93.5% anti-dumping duties on Chinese graphite imports

·    Kasiya offers supply chain diversification opportunity as battery manufacturers seek alternatives amid 160% effective tariffs on Chinese-sourced graphite

·    Latest coating optimisation testwork achieves successful CSPG production characteristics with superior performance metrics to support advancing offtake discussions

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce that at a time of unprecedented disruption in global graphite markets, with new U.S. tariffs fundamentally altering supply chain dynamics, the latest testwork on graphite from the Company’s Kasiya Rutile-Graphite Project (Kasiya or the Project) in Malawi has delivered highly successful results.  The testwork focused on optimising the coating process for conversion of Kasiya-derived spherical purified graphite (SPG) to coated spherical purified graphite (CSPG) while maintaining premium performance. The results will assist with ongoing offtake discussions with anode manufacturers. Sovereign is developing Kasiya to potentially become the world’s largest and lowest-cost natural graphite producer outside of China.

Figure 1: Natural Flake Graphite Industry Cost Curve For Projects at Prefeasibility Stage or Later

(Sources: See Appendix 1)

Strategic Market Opportunity

The global graphite supply chain is experiencing fundamental realignment following the U.S. Commerce Department’s 17 July 2025 announcement of 93.5% preliminary anti-dumping duties on Chinese graphite imports. Combined with existing tariffs, this creates an effective 160% barrier on Chinese graphite, fundamentally altering the economics for battery manufacturers seeking secure, cost-competitive supply chains. China currently controls approximately 75% of global graphite production and 97% of anode material processing, creating critical supply chain vulnerabilities that major battery manufacturers are now actively addressing.

Tesla, Inc. (Tesla) and Panasonic were among companies that opposed the new US tariffs, with Tesla’s submission to the U.S. Government stating that U.S. graphite producers have yet to demonstrate the “technical ability to produce commercial quantities” of graphite at the quality and purity required by Tesla and other battery cell manufacturers.

Once developed, Kasiya has the potential to become the world’s largest and lowest-cost natural flake graphite producer, offering battery manufacturers a strategic alternative to Chinese supply chains for anode material feedstock. The latest successful coating testwork is a further demonstration of Kasiya’s increasing strategic importance.

Latest Testwork Validates Kasiya Graphite’s World-Class Quality to Anode Manufacturers

Optimisation testwork conducted by Prographite GmbH (Prographite) has once again demonstrated the exceptional characteristics of Kasiya graphite for CSPG production. The optimisation process successfully achieved target coating specifications and optimised inputs into the coating process while maintaining the premium performance metrics that position Kasiya graphite among the highest-quality sources globally (refer to Announcement “Outstanding Battery Anode Material Produced From Kasiya Graphite” dated 4 September 2024 for previously announced premium performance metrics).

Managing Director and CEO Frank Eagar commented: “Kasiya remains a primary rutile project, but our ability to also produce exceptional CSPG with world-class performance characteristics from our natural graphite concentrate is a further demonstration of the geopolitically strategic nature of Kasiya. These new U.S. tariffs on Chinese graphite highlight the urgent need for reliable, high-quality alternatives. Kasiya’s resource scale, long life, potentially lowest-cost non-Chinese producer, combined with our demonstrated technical excellence, positions us perfectly to serve battery manufacturers seeking secure supply chain diversification.”

Pitch coating is a standard refinement process where carbon-rich pitch material is applied to spherical graphite particles to create protective layers that enhance battery performance and longevity, turning SPG into CSPG. The latest testwork systematically evaluated pitch content to achieve optimal performance parameters.

Key achievements from the process include:

·    Process Efficiency Demonstrated: Coating requirements optimised while maintaining superior CSPG characteristics

·    Premium Performance Maintained: All target specifications achieved for discharge capacity (>360mAh/g) and first cycle efficiency (>94%)

·    Physical Properties Achieved: Specific surface area (<4m²/g) and tap density (>1.0 g/cm³) specifications met

The electrochemical test results demonstrate the consistently high quality of CSPG produced from Kasiya graphite:

Table 1: Electrochemical Half-Cell Testing Results
Pitch Coating Level	Initial Charge (mAh/g)	Initial Discharge (mAh/g)	First Cycle Efficiency (%)
Baseline (100%)	390	369	94.64
Optimised (60%)	388	366	94.36

The data confirms that Kasiya graphite consistently delivers discharge capacity well above the critical 360mAh/g threshold while achieving first cycle efficiency above 94% – both key specifications for premium-quality natural graphite anode materials.

Customer Engagement Advances with Market Dynamics Creating Strategic Advantage

Initial samples of Kasiya fine flake graphite concentrate have been distributed to leading natural graphite anode producers and anode project developers. These strategic engagements will support the development of offtake agreements while validating market demand for Kasiya’s high-quality battery-grade graphite.

The Company continues advancing additional pilot-scale graphite concentrate processing to supply further concentrate material, with planning underway for a larger-scale concentrate processing run. These programs will support expanded customer qualification programs as development advances.

 

Enquiries
Frank Eagar, Managing Director & CEO South Africa / Malawi + 27 21 140 3190   Sapan Ghai, CCO London +44 207 478 3900

 

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